Japanese Billionaire Yusaku Maezawa Says He "Regrets" Losing $41 Million In The Stock Market Tyler Durden
Tue, 09/08/2020 – 22:00
Japanese billionaire Yusaku Maezawa – who is best known for participating in Twitter stunts, including agreeing to be Elon Musk’s lab rat for SpaceX’s planned trip to the moon – took to the internet this week and offered up a deep bow in the form of a Twitter post revealing he had lost $41 million in an attempt to trade stocks during the midst of the pandemic.
In a post he called “Deep Regrets”, the founder of online fashion retailer Zozo Inc, said he lost money on day trading and publicly expressed regret for the enormous sum of money he lost. He then “vowed to recover it through his business,”according to the South China Morning Post. In the industry, we call that chasing your losses.
Maezawa wrote: “I was blinded by the virus-driven market swings and lost 4.4 billion yen through repeated short-term trading of stocks, something I haven’t familiarised myself with. With 4.4 billion yen, how many people could the money have been given out to and saved? There’s no end to this regret.”
Maezawa made his money like any poor capital allocator does; by finding a worse capital allocator. He sold his company Zozo Inc. to Yahoo Japan, a subsidiary of Softbank, last year.
Maezawa had previously said he was going to give away $9 million USD to 1,000 of his Twitter followers that were selected at random for re-tweeting a post he made on January 1. He called it a “serious social experiment” to see if money made people happier.
But judging by his own “deep regrets” due to his massive trading losses, there may not be a point of such an experiment now – plus, he may just need to hold on to the money.
via ZeroHedge News https://ift.tt/3lXaUFU Tyler Durden
Chinese tech companies have been documented to cooperate with Chinese authorities on censoringinformation and pushing Beijing’s propaganda messages.
One way the Chinese Communist Party (CCP) uses a popular news aggregator app owned by ByteDance to promote the regime’s propaganda content to users was unveiled in an internal document recently obtained by The Epoch Times.
Meanwhile, previous comments by staff at ByteDance’s app platforms, detailing the extent to which the software collects user data, raises questions about whether algorithms work similarly at ByteDance’s most widely-used app internationally, TikTok, as it seeks to sell its U.S. business before the U.S. administration’s appointed deadline of Sept. 15. Citing the app’s Chinese ownership, risks to national security, and user data collection, President Donald Trump in late July signed executive orders to effectively ban TikTok from operating in the United States, unless it finds a U.S. buyer.
Document
In 2016, the Luohe city government propaganda bureau issued a notice to all Chinese Communist Party committees in the county and district-level government offices in the city. Luohe is a city located in central China’s Henan Province.
The notice informed all-party committees to set up accounts on Toutiao, a popular news aggregator app owned by ByteDance. It then describes how Toutiao can make the propaganda information issued by these accounts appear as recommendations for users that the government has targeted.
“When there’s a big event or emergency incident happening, it can distribute information to designated users and users in designated regions. It supports the government in spreading information efficiently,” the document stated.
The document said that the CCP committees would not need to increase their following for this to be effective.
The internal document that Luohe city government propaganda bureau issued in 2016. (Provided to The Epoch Times by Insider)
Algorithm
As early as Jan. 2018, Cao Huanhuan, software architect at Toutiao, explained how its algorithms track users’ preferences and habits, in a post on the app’s official website.
The algorithm needs to collect three types of information before promoting a post to a user: the characteristics of a post the user interacts with; the user’s characteristics; and where the user is when he/she opens the app, according to Cao.
The post’s characteristics include which kind of media it is, such as video, photo, picture, or text; the subject of the post, such as yoga, travel, or hip hop; how long it takes the user to read the post, such as video length, photos quantity, and text length; characteristics of the post’s creator.
The user’s characteristics include hobbies, profession, age, gender, which kind of phone he/she uses, the user’s browsing history on ByteDance apps, searching and surfing histories on the internet, shopping history, and so on.
The environment characteristics include the exact position of the user, such as at home, in a restaurant, or traveling abroad, etc.; what time of day; which kind of network the user is using, such as 3G, 4G, 5G, and Wifi; and weather conditions.
The algorithm will also cull the watch histories of other users who are similar to a particular user, such as those with similar hobbies or similar profession.
After the app obtains all three categories of information, an artificial intelligence (AI) tool will generation recommendations to the user.
Cao added that the algorithm can also be used to show suitable advertisements for this user.
ByteDance also created several blacklist databases, Cao said, in which millions of keywords or pictures the Chinese authorities have prohibited would not be allowed on its social media platforms. Any post containing one or more of these contents would be removed immediately, Cao said.
He did not give specifics as to how ByteDance or Toutiao is able to collect such vast amounts of data on users’ behavior and preferences, nor how its algorithm would pick up on prohibited content.
ByteDance did not respond to a request for comment.
The TikTok logo is displayed outside a TikTok office in Culver City, California on August 27, 2020. (Mario Tama/Getty Images)
Implications for TikTok?
But Cao noted that “The different social media platforms from our company [ByteDance] use this same powerful algorithm, but make adjustments according to each platform’s business models.”
And during the World AI Conference held virtually on July 11, Li Lei, director of ByteDance’s AI lab, said that his team’s designs are for all of ByteDance’s owned apps. The company owns over 20 apps.
In a recent job posting for an “algorithm engineer,” ByteDance said that the position would be “responsible for the company’s domestic and international products’ recommendations, ads, system infrastructure, big data, open platforms, and other core technologies.”
TikTok did not respond to a request for comment about its algorithm models.
The app’s algorithm may be the linchpin of any U.S. deal—as the Chinese regime revised its export control rules on Aug. 28, mandating that “technology based on data analysis for personalized information recommendation services” must be approved by Chinese authorities before export.
Market analysts have noted that this could mean ByteDance’s sale of TikTok’s U.S. operations would need approval from Beijing.
Meanwhile, TikTok’s Chinese ownership is the crux of the U.S. administration’s concerns about the possibility of user data being exploited by Beijing.
In The Epoch Times’ previous interview with former Chinese internet censorLiu Lipeng, he said he was scouted by ByteDance in China to become part of a team that would handle censorship on TikTok.
Another Epoch Times report also divulged the close ties between ByteDance and the Chinese Communist Party, with many of its managers also being members of the company’s Party unit. Companies in China are required to establish such Party organizations within their offices to ensure that business policies and employees toe the Party line.
Though TikTok has sought to distance itself from its Beijing owner, pointing to its American board members and executives, the app’s data collection and alleged censorship practices on international users have come under scrutiny in recent months.
The Epoch Times previously interviewed a Chinese international student whose TikTok account was blocked after he uploaded a video of himself lampooning the Chinese national anthem.
And the Wall Street Journal reported that some TikTok users were praising China in their videos in the hopes of gaming an algorithm that would favor China-friendly content and give them more exposure.
via ZeroHedge News https://ift.tt/2ZkVB07 Tyler Durden
Last fall, the Honorable Amy Coney Barrett delivered the 2019 Sumner Canary Memorial Lecture at the Case Western Reserve University School of Law: “Assorted Canards of Contemporary Legal Analysis: Redux.” The lecture has now been published in the Case Western Reserve Law Review.
Here is how Judge Barrett’s lecture begins:
It would be an honor for me to speak to you at any time, but I’m particularly honored to be doing so now, on the thirtieth anniversary of the Sumner Canary Lecture delivered by Justice Antonin Scalia, my former boss and mentor. His lecture, titled Assorted Canards of Contemporary Legal Analysis, described his “most hated legal canards”—baseless but frequently repeated statements that lawyers are “condemned to read, again and again, in the reported cases.” He took aim, for example, at the hoary canon that “remedial statutes are to be broadly construed.” He asked, “How are we to know what is a remedial statute?” “Are not all statutes intended to remedy some social problem?” “And why should we construe any statute broadly?” Statutes should be construed neither broadly nor narrowly, but at the level of generality at which they are written. And he bemoaned the well-worn phrase, “A foolish consistency is the hobgoblin of little minds.” Why is consistency in the law a bad thing?
Tonight, in the spirit of Justice Scalia’s Canary Lecture, I’m going to share my own list of canards.
Last fall, the Honorable Amy Coney Barrett delivered the 2019 Sumner Canary Memorial Lecture at the Case Western Reserve University School of Law: “Assorted Canards of Contemporary Legal Analysis: Redux.” The lecture has now been published in the Case Western Reserve Law Review.
Here is how Judge Barrett’s lecture begins:
It would be an honor for me to speak to you at any time, but I’m particularly honored to be doing so now, on the thirtieth anniversary of the Sumner Canary Lecture delivered by Justice Antonin Scalia, my former boss and mentor. His lecture, titled Assorted Canards of Contemporary Legal Analysis, described his “most hated legal canards”—baseless but frequently repeated statements that lawyers are “condemned to read, again and again, in the reported cases.” He took aim, for example, at the hoary canon that “remedial statutes are to be broadly construed.” He asked, “How are we to know what is a remedial statute?” “Are not all statutes intended to remedy some social problem?” “And why should we construe any statute broadly?” Statutes should be construed neither broadly nor narrowly, but at the level of generality at which they are written. And he bemoaned the well-worn phrase, “A foolish consistency is the hobgoblin of little minds.” Why is consistency in the law a bad thing?
Tonight, in the spirit of Justice Scalia’s Canary Lecture, I’m going to share my own list of canards.
California Towns Are Leasing Back Their Own Streets To Build Prisons, Finance Pensions Tyler Durden
Tue, 09/08/2020 – 21:20
California’s municipal fiefdoms have found a new way to unilaterally “refinance” their debt and book imaginary savings by eploiting an interesting-sounding financing alternative explored by Forbes writer Elizabeth Bauer: two cities in California are issuing bonds with their own city streets as collateral to pay down their unfunded pension liabilities, according to Forbes.
The two cities, West Covina and Torrance, are in SoCal. The city councils of the two communities in recent months have borrowed a combined $550 million in funds backed by their own city streets to try either to “refinance” money owed to CALPers, or to use on projects – or even more hospital beds and respirators, depending the circumstances.
These so-called “lease-revenue bonds” have one primary advantage to the local officials authorizing the borrowing. Unlike normal general-obligation bonds, LRBs can be undertaken without a vote, and quickly enough to allow officials a range of excuses, like taking advantage of low rates. According to Forbes, some of the money is being used to offset past under-funding of pension contributions.
Here’s the layperson’s description of LRBs from Schwab:
6. Lease revenue bonds: Lease revenue bonds are a unique structure in the muni market. Instead of issuing long-term debt, like general obligation bonds do, to finance improvements on a public facility, the municipality may enter into an arrangement that uses lease revenue bonds. Often a trust, not the municipality, issues bonds and generates revenues to pay the bonds back by leasing the facility to the municipality. The municipality will generally appropriate money during each budget session to meet the lease payment.
What matters most: The unique structure of a lease revenue bond makes the essentiality of the facility being leased and the legal protections on appropriating funds very important. Bonds backed by structures with lower essentiality and limited protections for appropriating funds will usually be lower-rated and have higher yields. Our opinion is to be cautious of bonds backed by lease revenues, as these bonds should be viewed more like general government bonds, not revenue bonds.
Although the name of the bonds implies that the streets are nominally being “leased,” the bondholders will not have any particular rights to lay claim to the streets; despite their status as “collateral,” the bondholders can’t take them over and charge tolls if a city defaults on the rent.
Instead, the town “leases” the area to a ‘financial authority’, which forks over the cash up front. The city will then pay the “rent” to the leased-back land. The “lease” component then becomes little more than a gimmick. The LRB is effectively an example of Wall Street helping to supplant the will of the voters.
Surprisingly, LRBs, or LROs (lease revenue obligations) are frequently used in Sacramento to help California finance prisons, something that’s almost impossible to do in california via a general obligation bond since it requires voter approval (and California is…California).
A group opposed to prisons has devised this ‘Q&A’ about Lease Revenue Bonds.
Like they say: “The only reason to use an LRB to build a prison is to bypass the will of the voters”.
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The next phase of the 25-year deal between China and Iran will focus on a large-scale roll-out of electronic espionage and warfare capabilities focused around the port of Chabahar and extending for a nearly 5,000 kilometer (3,000 mile) radius, and the concomitant build-out of mass surveillance and monitoring of the Iranian population, in line with the standard operating procedure across China, senior sources close to the Iranian government told OilPrice.com last week.
Both of these elements dovetail into Beijing’s strategic vision for Iran as a fully-functioning client state of China by the end of the 25-year period. By that time, Iran will be an irreplaceable geographical and geopolitical foundation stone in Beijing’s ‘One Belt, One Road’ project, as well as providing a large pool of young, well-educated, relatively cheap labor for Chinese industry. The mass surveillance, monitoring, and control systems to cover Iran’s population is to begin its full roll-out as from the second week of November, after the final agreement on event sequencing has been reached in the third week of October at a meeting between Iran’s most senior Islamic Revolutionary Guard Corps (IRGC) and intelligence services figures and their Chinese counterparts.
Iran’s Supreme Leader, Ali Khamenei, already agreed on the broad plans in July, according to the Iran sources.
“The plan is for nearly 10 million extra CCTV [closed-circuit television] cameras to be placed in Iran’s seven most populous cities, to begin with, plus another five million or so pinhole surveillance cameras to be placed at the same time in another 21 cities, with all of these being directly linked in to China’s main state surveillance and monitoring systems,” said an Iran source.
“This will enable the full integration of Iran into the next generation of China’s algorithmic surveillance system that allows for the targeting of behavior down to the level of the individual by combining these inputs with already-stored local, national, and regional records on each citizen, together with their virtual data footprints,” he said.
“At the same time as this, China will start to trial its own heavily-censored version of the internet via the Great Firewall of China [that prohibits foreign internet sites], in Iran, and to begin the broad roll-out of Mandarin as a key foreign language to be learned in school, initially alongside English, but then to replace English,” one of the Iran sources added.
“By the end of this process, these seven cities in Iran will be among the top 25 most surveilled cities in the world,” he underlined.
This Sino-technologicalisation of Iran is essential to the use of Iran’s labor force by China, as envisioned in the original 25-year plan that was agreed between Iran’s Foreign Minister, Mohammad Zarif, and his China counterpart, Wang Li, last year – itself a development of the previous strategic co-operation deal agreed in 2016. Specifically, Beijing intends to build factories and other centers of business that function as extensions of existing businesses in China, with the same machinery, technology, and production lines, managed by Chinese personnel who have been overseeing identical production lines in mainland China.
“It will be exactly like a factory has been picked up from the middle of China by a giant hand and then placed into Iran, just like Apple operates in China or Chinese firms operate in various African countries,” one of the Iran sources said.
The resultant products will then be able to access Western markets by dint of another element of the new 25-year deal, which will be the new transport infrastructure to be financed and implemented by Chinese companies in Iran. Shortly after the new 25-year deal was presented by Iran’s Vice President, Eshaq Jahangiri (and senior figures from the Economic and Finance Ministry, the Petroleum Ministry, and the Islamic Revolutionary Guard Corps to Iran’s Supreme Leader, Ali Khamenei) late last year, Jahangiri announced that Iran had signed a contract with China to implement a project to electrify the main 900 kilometer railway connecting Tehran to the north-eastern city of Mashhad. Adjunct to this, Jahangiri added that there are also plans to establish a Tehran-Qom-Isfahan high-speed train line and to extend this upgraded network up to the north-west through Tabriz.
In tandem with this increased surveillance of the population, China will use the end of the global arms embargo on Iran on 18 October to begin fast-tracked preparations for its increased military presence in Iran, as part of the ‘China-Iran Integrated Defence Strategy’ of the 25-year deal exclusively revealed by OilPrice.com in July. The top priority in these preparations will be ensuring that the military hardware and personnel that China, and Russia, are set to deploy as from the second week of November, are not vulnerable to attack. This equally applies to the oil and gas resources upon which Chinese and Russian firms are still working, despite the U.S. sanctions on Iran, under the guise of standalone contracts. Such efforts would encompass each of the three key EW areas – electronic support (including early warning of enemy weapons use) plus electronic attack (including jamming systems) plus electronic protection (including of enemy jamming), although in the Chinese system, unlike in the traditional Western model, cyber and electronic warfare have been merged into a single discipline.
More specifically, Iran will be host to a range of technology, equipment, and systems coming from both China and Russia, as part of a three-pronged usage strategy for Iran that includes – in addition to the monitoring, surveillance of the workforce – proactive intelligence-gathering capabilities, and an extensive defensive apparatus, as part of, in particular, Russia’s standard anti-access/area denial (A2/AD) operational approach in these conditions. Included in the hardware of the military package, according to the Iran sources, will be the highly-regarded Russian S-400 anti-missile air defense system and the Krasukha-2 and -4 systems that proved successful in Syria. This equipment will function alongside the new dual-use civilian/military centers across Iran, for the air force and naval assets. “In the same way that the Russian military Khmeimim Air Base near Latakia functions alongside the civilian Bassel Al-Assad International Airport in Syria, sharing many facilities, so many of the existing Iranian airports that are designated for this dual-use will be extended to accommodate warplanes from China, and to a lesser degree, Russia,” according to one of the Iranian sources.
“This process will begin with purpose-built dual-use facilities next to the existing airports at Hamedan, Bandar Abbas, Chabahar, and Abadan,” he added.
Indeed, OilPrice.com understands from these sources that the bombers to be deployed in the first instance will be China-modified versions of the long-range Russian Tupolev Tu-22M3s, with a manufacturing specification range of 6,800 kilometers (2,410 km with a typical weapons load), and the fighters will be the all-weather supersonic medium-range fighter bomber/strike Sukhoi Su-34, plus the newer single-seat stealth attack Sukhoi-57. It is apposite to note that in August 2016, Russia used the Hamedan airbase to launch attacks on targets in Syria using both Tupolev-22M3 long-range bombers and Sukhoi-34 strike fighters.
At the same time, Chinese and Russian military vessels will be able to use newly-created dual-use facilities at Iran’s key ports at Chabahar, Bandar-e-Bushehr, and Bandar Abbas, constructed by Chinese companies. These companies will have attached to their workforces another 5,000 Chinese ‘security personnel’ on the ground to protect the Chinese projects, although many of these will be air force pilots, warship and submarine officers, special forces officers, and intelligence officers, in addition to straightforward army personnel. “This number will be increased to nearly 50,000 military and neo-military Chinese and Russian personnel within the next 14 months, with around half of that number focussed on developing and safeguarding China’s oil and gas assets in Iran and the other half being used in air force, navy, and intelligence hands-on and training roles,” one of the Iran sources said.
In tandem with all of this, as from the second week of November, China plans to build one of the biggest intelligence gathering listening stations in the world, in Chabahar.
“It will have a staff of nearly 1,000, comprising top Chinese intelligence and communications experts, plus some Russians to support their equipment and technology in the field, with a very small number of Iranians chosen from the top ranks of the IRGC in training, and will have a near-5,000 kilometer radius range,” he said.
“This will allow the station to intercept, monitor, and neutralize the C4ISR [Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance] systems used by NATO members and associate members, including U.S.-friendly countries in the region, most notably, Saudi Arabia, the UAE, and Israel,” he added.
As such, the Chabahar facility will allow Beijing to extend its reach in monitoring and disrupting the communications of its perceived enemies across an area ranging from the edge of Austria in the West (including all the former Yugoslav states, Greece, and Turkey), to Egypt, Sudan, Ethiopia, Somalia, and Kenya in the south, and back to the East across all of Afghanistan, India, Pakistan, and Thailand. The Chabahar facility will also be connected into Russia’s intelligence gathering stations in and around its core military bases in Syria – the naval facility in Tartus, and the Khmeimim Air Base near Latakia – which, in turn, would allow it to be easily be tied in to Russia’s Southern Joint Strategic Command 19th EW Brigade (Rassvet) near Rostov-on-Don, which links into the corollary Chinese systems.
via ZeroHedge News https://ift.tt/2ZfUsXC Tyler Durden
Secondary-Market ‘Rolex Bubble’ At Risk Of Imploding, Top Watch Trader Warns Tyler Durden
Tue, 09/08/2020 – 20:40
At the start of September, the new Rolex Submariner was launched by the famed Swiss watchmaker in eight different variations. As new subs are released, the second market for mass-produced Rolex’s are in a “bubble” and at risk of ‘imploding,’ said WatchPro, quoting one of the world’s largest pre-owned watch traders.
WatchBox’s chief revenue officer Mike Manjos said new watch launches from Rolex were unveiled on Sept. 1. He said a global shortage of watches developed after the pandemic-related lockdowns that resulted in price increases for Rolex watches on the secondary market.
“Now that [Rolex] retailers have reopened, we are seeing global shortages and prices continuing to rise,” Manjos said.
“We have offices all over the world, and everywhere we find empty cases,” he added.
Manjos said investors bidding up Swiss watches with limited quantities or ones that are being discontinued would make sense, but he warned Subs and Daytonas, ones that are manufactured on an industrial scale, could soon see a shift in the market as new references are released that would result in declining prices on the secondary market.
“I understand rising prices for Hulks and Batmans that are no longer produced, but I am nervous about Submariners and Daytonas. These are watches that are produced in decent quantities,” he suggested.
“Yesterday a dealer was asking $11,500 for a stainless steel Sub. This is watch that used to sit in a case. I do not know why people would want that watch when a new one comes out, so it scares me that the air could come out of that bubble,” he said.
Manjos said “white Daytonas are selling for well over $25,000 and heading quickly towards $30,000. I think that is a piece we might see come back to reality in the coming weeks.
Manjos described, in the video below, the secondary market bubble developing in Subs and Daytonas.
Readers may recall, the Swiss watch industry experienced an “unparalleled shock” in the first half of the year as watch exports crashed thanks to the virus-related lockdowns. Though our reporting in August suggested the worst could be over for the industry.
To sum up, readers should probably avoid purchasing used Subs and Daytonas as supply comes online.
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The Ninth Circuit handed down a new decision last week, United States v. Moalin, on the telephony metadata program that Edward Snowden revealed in 2013. The opinion, by Judge Marsha Berzon, has drawn some attention for its rulings on the lawfulness of the now-expired program. But there’s a part of the opinion that has been mostly overlooked that strikes me as much more important. Starting around page 36 of the opinion, the court appears to articulate a new Fourth Amendment notice requirement. It suggests that that defendants charged with crimes must be notified about surveillance practices that led to evidence that may be used in their case.
This holding was easy to miss if you weren’t looking for it, in part because the court doesn’t even apply its own test. Because the defendants learned of the surveillance anyway, the court rules, there was no prejudice and the court doesn’t need to reach whether the notice requirement applied to the facts of Moalin. But although this passage ends up having no bearing on this one case, it strikes me as potentially a pretty big deal going forward for the field of surveillance law.
I thought I would blog about the passage, and its potential significance, to alert practitioners and interested readers.
I. The Traditional Fourth Amendment Notice Requirement
Here’s the context. The Fourth Amendment traditionally has only one notice requirement. When the government executes a search warrant, the government has to give notice—even if delayed notice—that the warrant was executed. See, e.g.,Dalia v. United States, 441 US 238, 247-48 (1979). Normally the search itself will give notice, as it’s hard to miss when the police knock down your door and take away your stuff. But even if the search itself doesn’t provide notice, the government has to give post-search notice that the search occurred. See id.
In the past, at least, this notice requirement has been understood to be pretty modest. For example, say the government gets a warrant to seize all of your e-mails held by your e-mail provider. The provider shares all of your e-mails, and the government looks through them. Do you get notice? No, the courts say. The Fourth Amendment notice requirement is satisfied by notice to the e-mail provider rather than to you. The search occurred there, and what matters is that notice was provided where the search occurred. See, e.g.,United States v. Scully, 108 F. Supp.3d 59, 83-84 (E.D.N.Y. 2015).
II. The Ninth Circuit’s Notice Requirement
Enter the new Ninth Circuit decision. As I read it, it has a very different concept of the Fourth Amendment’s notice requirement.
In Moalin, the question was whether defendants had to be notified about a warrantless national security program involving collection of telephone metadata that had been collected about them as part of the investigation. I would have thought the answer is “no.” Most obviously, there was no search warrant about which to give notice. And beyond that, the program under then-existing precedent would have thought to not be a search at all.
The Ninth Circuit imagines a different kind of notice requirement, though. Instead of a notice requirement that a warrant was executed, flowing from the warrant itself, this is a notice requirement that appears to be triggered only if and when criminal charges are filed providing notice that evidence about a person was collected using a surveillance practice that may or may not be a search. In effect, it’s a notice to criminal defendants to consider filing a motion to suppress to challenge the investigation and vindicate any Fourth Amendment rights that may or may not have been at stake.
Here’s the passage from the opinion reproduced in full:
The Fourth Amendment requires that a person subject to a government search receive notice of the search, absent “exigent circumstances.” Berger v. State of New York, 388 U.S. 41, 60 (1967); see United States v. Freitas, 800 F.2d 1451, 1456 (9th Cir. 1986). Courts have excused advance notice in the wiretapping context for a practical reason: if the subject of a wiretap were “told in advance that federal officers intended to record his conversations, the point of making such recordings would obviously [be] lost.” Katz, 389 U.S. at 355 n.16. In such circumstances, the government must provide a “constitutionally adequate substitute for advance notice.” Dalia v. United States, 441 U.S. 238, 248 (1979). Dalia explained that the Wiretap Act, which governs the use of electronic surveillance in criminal investigations, meets this requirement by instructing that “once the surveillance operation is completed the authorizing judge must cause notice to be served on those subjected to surveillance.” Id. (citing 18 U.S.C. § 2518(8)(d)); see United States v. Donovan, 429 U.S. 413, 429 n.19 (1977).
The government argues that Berger and Dalia are inapposite here because they dealt with ordinary criminal investigations, and the Fourth Amendment requirements are different in the foreign intelligence context. The government points to United States v. Cavanagh, which quoted United States v. United States District Court (Keith), 407 U.S. 297, 322–23 (1972), for the proposition that a different standard may be compatible with the Fourth Amendment in the intelligence-gathering context if it is “reasonable both in relation to the legitimate need of Government for intelligence information and the protected rights of our citizens.” 807 F.2d 787, 790 (9th Cir. 1987). Cavanagh held that “FISA satisfies the constraints the Fourth Amendment places on foreign intelligence surveillance conducted by the government.” Id.
For our purposes, the essential insight of Cavanagh is that even if the Fourth Amendment applies differently in the foreign intelligence context, it still applies, at least if U.S. persons are involved.
Cavanagh did not address the Fourth Amendment’s notice requirement, but the insight we glean from it bears on our analysis here: because the Fourth Amendment applies to foreign intelligence investigations, U.S. criminal defendants against whom the government uses evidence obtained or derived from foreign intelligence surveillance may have Fourth Amendment rights to protect. The principal remedy for a Fourth Amendment violation is the exclusionary rule: a criminal defendant may seek suppression of evidence obtained from an unlawful search or seizure, as well as of the “fruits” of that evidence—additional evidence to which it led. See Wong Sun, 371 U.S. at 488. But criminal defendants who have no knowledge that a potentially unconstitutional search has played a part in the government’s case against them have no opportunity to vindicate any Fourth Amendment-protected rights through suppression.
Notice is therefore a critical component of the Fourth Amendment in the context of a criminal prosecution. And although the Fourth Amendment may apply differently to foreign intelligence surveillance than to searches undertaken in ordinary criminal investigations, notice of a search plays the same role in the criminal proceeding: it allows the defendant to assess whether the surveillance complied with the Fourth Amendment’s requirements, whatever the parameters of those requirements are. Indeed, the Supreme Court has recognized that the notice provisions in FISA and the FAA serve precisely that function. See Amnesty Int’l USA, 568 U.S. at 421 & n.8.
At the same time, the need for secrecy inherent in foreign intelligence investigations justifies a more circumscribed notice requirement than in the ordinary criminal context. See Kris & Wilson, supra note 5, § 29:2 (discussing the need for secrecy). Whereas the Wiretap Act requires notice at the end of an investigation regardless of whether an indictment is filed, 18 U.S.C. § 2518(8)(d), the FISA and FAA notice provisions are more limited, requiring notice only when the “Government intends to enter into evidence or otherwise use or disclose in any trial . . . or other proceeding in or before any court . . . or other authority of the United States, against an aggrieved person, any information obtained or derived from an electronic surveillance of that aggrieved person pursuant to the authority of this subchapter,” 50 U.S.C. § 1806(c); see id. §§ 1825(d) (physical search), 1845(c) (pen register and trap-and-trace surveillance); 1881e(a)(1) (FAA).16 According to the Senate Judiciary Committee Report accompanying FISA, Congress was aware that it was “depart[ing] from traditional Fourth Amendment criminal procedures,” but it concluded that the “need to preserve secrecy for sensitive counterintelligence sources and methods justifies elimination” of the “requirement of subsequent notice to the surveillance target . . . unless the fruits are to be used against him in legal proceedings.” S. Rep. No. 95-701, at 11–12 (1978) (emphasis added).
At a minimum, then, the Fourth Amendment requires notice to a criminal defendant when the prosecution intends to enter into evidence or otherwise use or disclose information obtained or derived from surveillance of that defendant conducted pursuant to the government’s foreign intelligence authorities. See Dalia, 441 U.S. at 248; Berger, 388 U.S. at 60.
This constitutional notice requirement applies to surveillance conducted under FISA and the FAA, which codify the requirement with respect to several types of surveillance. 50 U.S.C. §§ 1806(c), 1825(d), 1845(c), 1881e(a)(1). It also applies to surveillance conducted under other foreign intelligence authorities, including Executive Order 12,333 and the FAA’s predecessor programs. Indeed, the notice requirement is of particular importance with regard to these latter, non-statutory programs precisely because these programs lack the statutory protections included in FISA. Where statutory protections are lacking, the Fourth Amendment’s reasonableness requirement takes on importance as a limit on executive power, and notice is necessary so that criminal defendants may challenge surveillance as inconsistent with that requirement.
We emphasize that notice is distinct from disclosure. Given the need for secrecy in the foreign intelligence context, the government is required only to inform the defendant that surveillance occurred and that the government intends to use information obtained or derived from it. Knowledge of surveillance will enable the defendant to file a motion with the district court challenging its legality. If the government avers that disclosure of information relating to the surveillance would harm national security, then the court can review the materials bearing on its legality in camera and ex parte. See, e.g., 50 U.S.C. § 1806(f) (allowing in camera, ex parte review of the legality of electronic surveillance under FISA Subchapter I if “the Attorney General files an affidavit under oath that disclosure or an adversary hearing would harm the national security of the United States”).
The Ninth Circuit handed down a new decision last week, United States v. Moalin, on the telephony metadata program that Edward Snowden revealed in 2013. The opinion, by Judge Marsha Berzon, has drawn some attention for its rulings on the lawfulness of the now-expired program. But there’s a part of the opinion that has been mostly overlooked that strikes me as much more important. Starting around page 36 of the opinion, the court appears to articulate a new Fourth Amendment notice requirement. It suggests that that defendants charged with crimes must be notified about surveillance practices that led to evidence that may be used in their case.
This holding was easy to miss if you weren’t looking for it, in part because the court doesn’t even apply its own test. Because the defendants learned of the surveillance anyway, the court rules, there was no prejudice and the court doesn’t need to reach whether the notice requirement applied to the facts of Moalin. But although this passage ends up having no bearing on this one case, it strikes me as potentially a pretty big deal going forward for the field of surveillance law.
I thought I would blog about the passage, and its potential significance, to alert practitioners and interested readers.
I. The Traditional Fourth Amendment Notice Requirement
Here’s the context. The Fourth Amendment traditionally has only one notice requirement. When the government executes a search warrant, the government has to give notice—even if delayed notice—that the warrant was executed. See, e.g.,Dalia v. United States, 441 US 238, 247-48 (1979). Normally the search itself will give notice, as it’s hard to miss when the police knock down your door and take away your stuff. But even if the search itself doesn’t provide notice, the government has to give post-search notice that the search occurred. See id.
In the past, at least, this notice requirement has been understood to be pretty modest. For example, say the government gets a warrant to seize all of your e-mails held by your e-mail provider. The provider shares all of your e-mails, and the government looks through them. Do you get notice? No, the courts say. The Fourth Amendment notice requirement is satisfied by notice to the e-mail provider rather than to you. The search occurred there, and what matters is that notice was provided where the search occurred. See, e.g.,United States v. Scully, 108 F. Supp.3d 59, 83-84 (E.D.N.Y. 2015).
II. The Ninth Circuit’s Notice Requirement
Enter the new Ninth Circuit decision. As I read it, it has a very different concept of the Fourth Amendment’s notice requirement.
In Moalin, the question was whether defendants had to be notified about a warrantless national security program involving collection of telephone metadata that had been collected about them as part of the investigation. I would have thought the answer is “no.” Most obviously, there was no search warrant about which to give notice. And beyond that, the program under then-existing precedent would have thought to not be a search at all.
The Ninth Circuit imagines a different kind of notice requirement, though. Instead of a notice requirement that a warrant was executed, flowing from the warrant itself, this is a notice requirement that appears to be triggered only if and when criminal charges are filed providing notice that evidence about a person was collected using a surveillance practice that may or may not be a search. In effect, it’s a notice to criminal defendants to consider filing a motion to suppress to challenge the investigation and vindicate any Fourth Amendment rights that may or may not have been at stake.
Here’s the passage from the opinion reproduced in full:
The Fourth Amendment requires that a person subject to a government search receive notice of the search, absent “exigent circumstances.” Berger v. State of New York, 388 U.S. 41, 60 (1967); see United States v. Freitas, 800 F.2d 1451, 1456 (9th Cir. 1986). Courts have excused advance notice in the wiretapping context for a practical reason: if the subject of a wiretap were “told in advance that federal officers intended to record his conversations, the point of making such recordings would obviously [be] lost.” Katz, 389 U.S. at 355 n.16. In such circumstances, the government must provide a “constitutionally adequate substitute for advance notice.” Dalia v. United States, 441 U.S. 238, 248 (1979). Dalia explained that the Wiretap Act, which governs the use of electronic surveillance in criminal investigations, meets this requirement by instructing that “once the surveillance operation is completed the authorizing judge must cause notice to be served on those subjected to surveillance.” Id. (citing 18 U.S.C. § 2518(8)(d)); see United States v. Donovan, 429 U.S. 413, 429 n.19 (1977).
The government argues that Berger and Dalia are inapposite here because they dealt with ordinary criminal investigations, and the Fourth Amendment requirements are different in the foreign intelligence context. The government points to United States v. Cavanagh, which quoted United States v. United States District Court (Keith), 407 U.S. 297, 322–23 (1972), for the proposition that a different standard may be compatible with the Fourth Amendment in the intelligence-gathering context if it is “reasonable both in relation to the legitimate need of Government for intelligence information and the protected rights of our citizens.” 807 F.2d 787, 790 (9th Cir. 1987). Cavanagh held that “FISA satisfies the constraints the Fourth Amendment places on foreign intelligence surveillance conducted by the government.” Id.
For our purposes, the essential insight of Cavanagh is that even if the Fourth Amendment applies differently in the foreign intelligence context, it still applies, at least if U.S. persons are involved.
Cavanagh did not address the Fourth Amendment’s notice requirement, but the insight we glean from it bears on our analysis here: because the Fourth Amendment applies to foreign intelligence investigations, U.S. criminal defendants against whom the government uses evidence obtained or derived from foreign intelligence surveillance may have Fourth Amendment rights to protect. The principal remedy for a Fourth Amendment violation is the exclusionary rule: a criminal defendant may seek suppression of evidence obtained from an unlawful search or seizure, as well as of the “fruits” of that evidence—additional evidence to which it led. See Wong Sun, 371 U.S. at 488. But criminal defendants who have no knowledge that a potentially unconstitutional search has played a part in the government’s case against them have no opportunity to vindicate any Fourth Amendment-protected rights through suppression.
Notice is therefore a critical component of the Fourth Amendment in the context of a criminal prosecution. And although the Fourth Amendment may apply differently to foreign intelligence surveillance than to searches undertaken in ordinary criminal investigations, notice of a search plays the same role in the criminal proceeding: it allows the defendant to assess whether the surveillance complied with the Fourth Amendment’s requirements, whatever the parameters of those requirements are. Indeed, the Supreme Court has recognized that the notice provisions in FISA and the FAA serve precisely that function. See Amnesty Int’l USA, 568 U.S. at 421 & n.8.
At the same time, the need for secrecy inherent in foreign intelligence investigations justifies a more circumscribed notice requirement than in the ordinary criminal context. See Kris & Wilson, supra note 5, § 29:2 (discussing the need for secrecy). Whereas the Wiretap Act requires notice at the end of an investigation regardless of whether an indictment is filed, 18 U.S.C. § 2518(8)(d), the FISA and FAA notice provisions are more limited, requiring notice only when the “Government intends to enter into evidence or otherwise use or disclose in any trial . . . or other proceeding in or before any court . . . or other authority of the United States, against an aggrieved person, any information obtained or derived from an electronic surveillance of that aggrieved person pursuant to the authority of this subchapter,” 50 U.S.C. § 1806(c); see id. §§ 1825(d) (physical search), 1845(c) (pen register and trap-and-trace surveillance); 1881e(a)(1) (FAA).16 According to the Senate Judiciary Committee Report accompanying FISA, Congress was aware that it was “depart[ing] from traditional Fourth Amendment criminal procedures,” but it concluded that the “need to preserve secrecy for sensitive counterintelligence sources and methods justifies elimination” of the “requirement of subsequent notice to the surveillance target . . . unless the fruits are to be used against him in legal proceedings.” S. Rep. No. 95-701, at 11–12 (1978) (emphasis added).
At a minimum, then, the Fourth Amendment requires notice to a criminal defendant when the prosecution intends to enter into evidence or otherwise use or disclose information obtained or derived from surveillance of that defendant conducted pursuant to the government’s foreign intelligence authorities. See Dalia, 441 U.S. at 248; Berger, 388 U.S. at 60.
This constitutional notice requirement applies to surveillance conducted under FISA and the FAA, which codify the requirement with respect to several types of surveillance. 50 U.S.C. §§ 1806(c), 1825(d), 1845(c), 1881e(a)(1). It also applies to surveillance conducted under other foreign intelligence authorities, including Executive Order 12,333 and the FAA’s predecessor programs. Indeed, the notice requirement is of particular importance with regard to these latter, non-statutory programs precisely because these programs lack the statutory protections included in FISA. Where statutory protections are lacking, the Fourth Amendment’s reasonableness requirement takes on importance as a limit on executive power, and notice is necessary so that criminal defendants may challenge surveillance as inconsistent with that requirement.
We emphasize that notice is distinct from disclosure. Given the need for secrecy in the foreign intelligence context, the government is required only to inform the defendant that surveillance occurred and that the government intends to use information obtained or derived from it. Knowledge of surveillance will enable the defendant to file a motion with the district court challenging its legality. If the government avers that disclosure of information relating to the surveillance would harm national security, then the court can review the materials bearing on its legality in camera and ex parte. See, e.g., 50 U.S.C. § 1806(f) (allowing in camera, ex parte review of the legality of electronic surveillance under FISA Subchapter I if “the Attorney General files an affidavit under oath that disclosure or an adversary hearing would harm the national security of the United States”).
The employment recovery in the United States is as impressive as the collapse due to the lockdowns.
In April, I wrote a column stating that the U.S. labor market can heal quickly, and the improvement has been positive. Very few would have expected the unemployment rate to be at 8.4 percent in August after soaring to almost 15 percent in the middle of the pandemic.
This means that the unemployment rate is in August 2020 lower than what analysts projected for the end of 2020. Even the measure of underemployment (U-6) has fallen from 22.8 percent to 14.2 percent.
In August, the number of people who usually work full time rose by 2.8 million to 122.4 million, or 8.5 million below the level of August 2019, and the number of people not in the labor force who currently want a job declined by 747,000 to 7 million, which is still 2 million higher than in February. This means both incredibly positive news and that there’s a lot left to do. Few would have expected full-time employment to be as close to last year’s level by now.
Since the reopening, the United States has recovered almost 11 million jobs, continuing jobless claims have fallen rapidly from 25 million to 13.25 million, and full-time employment is rising strongly, while the Atlanta Fed median wage growth tracker remains at 3.9 percent for 2020.
It’s true that the good jobs data for August includes part-time workers hired for census activity, but the truth is that those accounted for about one out of every six new jobs created.
Even acknowledging that there’s a lot of work to do to recover the record levels of employment of February 2020, at this rate the United States would be able to return to all-time high levels of employment by the first quarter of 2021, instead of 2023 as the Federal Reserve estimates. We must remember that the track record of the Federal Reserve in estimating unemployment has been to err on the side of pessimism, particularly in the past three years.
What the United States needs to do to recover jobs and return to real wage growth and the path to full employment is both easy and challenging.
The United States needs to cut red tape and bureaucratic burdens to new business creation, lift regulatory and fiscal burdens that prevent small and medium enterprises from growing into large companies, and maintain an attractive tax system that incentivizes investment, capital repatriation, and supports job creation.
Anyone can understand this. Why is it challenging, then?
In the middle of an election year there are too many misguided proposals from the left demanding higher taxes, more government interventionism, and more regulatory burdens. It seems that many politicians cannot learn from the mistakes of the eurozone.
Higher taxes and more interventionism will not deliver better public services and stronger finances. The eurozone is the proof that higher taxes still drove most countries to historic high levels of debt and unemployment while public services did not improve. Deficit spending is not solved by raising taxes but by cutting unnecessary spending. With a rising tax wedge, growth is weaker, job creation is poorer, and the deficit remains stubbornly high because expenditures rise in growth and crisis periods significantly above receipts.
The French Prime Minister Jean Castex announced last week at the presentation of the country’s latest tax cut and stimulus plan that “there will be no tax increase.”
“We will not reproduce the past mistake of making tax increases that weaken our growth and send negative signals to both households and companies,” he said.
France has one of the highest tax wedges in the world and has suffered stagnation for two decades, high deficits, and constant public service cuts due to the unsustainability of its finances. The United States should not fall into the trap that France is slowly trying to get out of.
The best social policy is strong job creation and rising wages. Entitlements do not make a society more prosperous and ultimately drive it to stagnation.
The employment recovery in the United States has been a positive surprise for most commentators, but the path to full employment will not be achieved by putting the brakes on job creation and investment. This is a time in which no politician should be doing any other job than to listen to employers, investors, and businesses. Copying European mistakes is not just pointless, it’s irresponsible.
via ZeroHedge News https://ift.tt/3h5RsTS Tyler Durden
